USSRThe 20th century produced many monsters, but
in the top three of any league would be Hitler and Stalin. They murdered
and massacred on an industrial scale. Both were empire builders. When
Germany fought the Soviet Union in 1941-45 there was the greatest carnage
in human history. The Soviet Union lost over 20 million dead. The
privations and carnage of that war, known as the Great patriotic War in
the USSR, cast a long shadow over the people of the Soviet Union even
today.

Stalin died in 1953 and was replaced by
Krushchev as the Cold War [1947-1989] raged. Krushchev started a process
of de-stalinization to ease some of the worst excesses and repression of
the Stalin era inside the USSR but his foreign policy was still aggressive
as the Cuban Missile Crisis of 1962 showed. In 1964, Krushchev retired and
his successors changed tack and pursued a policy of détente with the West.
This policy began to collapse with the arrival of President Reagan in
1980. Eventually Gorbachev was elected in 1985 and he realised that the
Soviet Union had to change or die. By the mid-1980s the Soviet Union was
failing in virtually every measure compared to the West. Gorbachev’s plan
to open and modernise the Soviet system was to prove too little too late.
The satellite countries were already heading for secession from the Soviet
Bloc and there was little that could be done to stop them. In 1989 the
Berlin Wall came down and the Soviet Bloc dissolved. On December 8th 1991
the Soviet Union itself was formally dissolved. The Cold War of 1947-89
[or arguably 1945-89] was over and the Soviet empire was in ruins.
European communism was dead.

In 1977, the Soviet Union was still pursuing
détente and the then Redifon Computers was still looking for opportunities
to exploit its unique position in Eastern Europe. The manufacturing
licence in Poland plus the direct marketing in Poland, Czecho-Slovakia and
Hungary were successful with good prospects. The obvious next step was the
USSR using an established reputation as a lever.

In the 1970s, the USSR was a scary place for
foreigners. The tight security, bureaucracy and general hostility were
enough to frighten all but the most intrepid. Obtaining a visa to visit
was difficult. All travel and accommodation arrangements were made through
the state tourist office –Intourist. No variations to schedule were
permitted. On the first visit to Moscow, business people were sent to the
Rossiya Hotel [demolished in 2006], a fortress-sized 21 floor block next
to Red Square with over 3200 rooms. It was reputedly the largest hotel in
the world. One floor of the hotel housed the surveillance equipment that
bugged every room and telephone. Dirty tricks, embarrassments and
provocations were commonplace. The food was terrible. The main restaurant
had a menu that would have put the Waldorf-Astoria to shame, save that the
only dish that was ever available was Polish chicken. Because this was
never announced to guests ordering food became something of an endurance
test.

We had managed to get visas to exhibit at two
Trade Fairs in Moscow. Our work in Eastern Europe probably meant that we
were viewed with slightly less suspicion than other newcomers. We also had
a secret weapon. Our computer system was English-language based. We had
found that to be acceptable in the satellite countries provided that we
could expand the character set with some local national characters, but
still a Latin character set. Sadly, the USSR did not use the Latin
alphabet. The Cyrillic alphabet, named after St. Cyril, was the only
acceptable alphabet. It needed a 128 character set, twice as big as the UK
64 character set, and it was one of the biggest barriers to entry of the
market. There was no national or international standard for this character
set so anyone producing their own version was taking a risk. The other
problem was that all systems messages, instructions and prompts had to be
in Cyrillic. The users did not know English or English characters. The
secret weapon is that we had developed both capabilities. We had a
quasi-USSR computer and the Soviets loved it when they saw it. Later we
produced a Cyrillic Teleputer that became the first Soviet colour PC.
Fortunately our version of Cyrillic was found to be good.

In 1977 we were looking for a prestigious
launch client and we came upon the Moscow food processing plant. This huge
plant was a copy of a 1924 Chicago meat packing plant. It produced about
800 tons of sausages and cooked meats every day. Everyone in Moscow knew
of it. It was called Mosmyasaprom. The plant worked on a simple logical
process. Livestock were driven up a ramp, slaughtered on the top floor and
then sausages came out of the bottom floor and were loaded into trucks for
delivery to meet customers’ orders. It was mass production old-Chicago
style. The buildings were long past their best and seemed to have missed
out on paint and maintenance. But the food was important and the factory
did have a problem – orders were not being met and no-one knew the reason.

We were asked to look at the manual system and
make recommendations for improvements using a computer. We decided to
computerise the order entry [700 orders per day], produce the production
requirements and loading and run off the truck loadings and delivery
schedules. The client was delighted with the plan and decided to build a
brand-new order processing centre and equip it with a modern telephone
system and our computer system. We were pleased. It was our first USSR
contract. We were summoned to the factory for an 8.30 am meeting for
speeches and to sign the contract. We then adjourned to lunch just before
9.00 am. We were taken into the bowels of the factory to a dining room
that had a 30ft table. There were 2 of us and the client had a group of
around 18. The table was laden with the produce of the factory together
with some bread. Shoulder-to-shoulder down the middle of the table were
bottles of vodka.

In Eastern Europe, formal dinners usually
begin with a toast. Unless it is very formal the first toast is ‘The
Beautiful Ladies’ though no women were ever present and beautiful ladies
were generally in short supply. Thereafter, for the duration of the meal,
each side would continually reciprocate with a toast. It was very
friendly. The toasts were always vodka in a glass to be drained at one
gulp. I could never do that so I cheated. If anyone noticed they never
said anything. The vodka was around 85% proof. By 6.00pm the meal was
over, the food and vodka had been devoured. We were the only ones
conscious –just. I remember getting outside the factory with my colleague
and being nearly blown over by the cold wind. Our driver [who probably had
a number of concurrent employers] had been waiting since 8.15am. He did
not seem in the least bit surprised or pleased to see us. He took us back
to the Rossiya. The contract was in my briefcase. Welcome to the USSR!
No-one does business like the Russians.

The first contract was an eye-opener.
Mosmyasaprom was well organized and quickly started work on the new
building while we started training their engineers in the UK. The
engineers course was 13 weeks and difficult. It was given in English with
simultaneous translation into Russian. One of the Russian engineers was
clearly in charge of the others and he clearly was not a particularly good
engineer. We had booked them into a large guest house that we used for
Eastern European engineers on training courses. It was a friendly place
with good standards. We had found that 13 weeks was a long time to be away
from home in a strange land with little money. The guest house was more
homely than a hotel. Staying at the guest house at this time were some
Polish engineers, whence this story. On the first night after dinner, the
Russian in charge led the other Russians into the centre of Crawley, a
short walk away. Crawley isn’t Rodeo Drive but it is a good
middle-of-the-road shopping centre and the shops were well-stocked.

The Russian in charge mustered his men in
front of ‘Marks and Spencer,’ a well-known clothing store, and said;
‘Comrades, you are very special, very important people. The English want
to impress you. Look around! They have built this film set for you and
they have filled it with actors. But you are not fooled! Their twisted
propaganda is wasted. We know the truth. So now we go back to our hotel!’
And back to the guest house they went.

Each morning a company min-bus collected all
the engineers and took them to the training school. A day or so after the
‘film-set’ incident the Poles and Russians started fighting on the bus.
The bus driver was an old cockney Millwall supporter, not completely
unused to the occasional fracas on the football terraces. He promptly
drove the bus on to the middle of the railway crossing in the centre of
Crawley, stopped it, got out and locked it. He then tapped on the window
until someone responded and apparently with a few economical gestures he
indicated to them their predicament. He never had any further trouble with
them although they asked him to change his route and avoid the railway
crossing. From then on we separated the engineers into different guest
houses. We had not understood the depths of the mutual antipathy.

The Mosmyasaprom project went well. All the
deadlines were met. The system performed perfectly. Many speeches were
made. Everyone was delighted.

A couple of years later, by chance, we met
some of the management in a Moscow restaurant. They were very friendly and
said the computer worked well but, alas, there were still problems with
the deliveries. They thought they might need a bigger computer. So we
naturally volunteered to hep them. We were officially invited to the
factory and we went. We checked over the complete system and we could not
find a problem. Everything seemed to work to specification and we were
stumped for an explanation. The order processing centre was a good quality
new building. There was a door that led across the yard to the factory.
The supervisor said that the schedules were run off every afternoon for
the factory production overnight for next day deliveries, just as the
system had been designed to do. We found ourselves alone for the moment
and walked across the yard to an open door. Inside the doorway, in a
make-shift plywood cubicle, an old man was sitting at a table covered with
print-outs. He had a pen in his hand.

We went back to the order processing centre.
No-one wanted to talk about the man in the cubicle. Finally, when we were
leaving, someone walked us toward our car and said- ‘He takes the
schedules every day. He says; he can’t have this; he can’t sell that; he
is my wife’s cousin so he can have some more; he is important so he must
get an early delivery and so one. He changes everything. He decides what
we make and who gets it. And then our informant shrugged. Now I understood
the planned economy.

We had obviously passed some sort of test with
our first client. The next client was GOSBANK, the State Bank of the USSR
[like the Bank of England or the US Federal Reserve.] The job was to
collect and collate all the financial returns from the 100 Financial
Centres across the USSR. At the same time we received a contract from
Veronezh Steelworks 60 miles outside Moscow. It was interesting because we
had been active in the steel industry in Czecho-Slovakia and Poland. This
contract enabled us to travel outside Moscow for the first time. We were
quietly becoming established.

In 1979, the Soviet Union invaded Afghanistan
for the same reason everyone in the past has invaded Afghanistan – to
create a stable, client state as a buffer against other Powers. It was
pure 19th century colonialism and ended in ignominy in 1988 when the Red
Army withdrew after losing 136,000 dead. The world was angry with the
Soviets. Ronald Reagan became President in January 1980 vowing to destroy
the ‘evil empire.’ Amongst other things he demanded that the West boycott
the 1980 Summer Olympics in Moscow. He also introduced crackdown measures
to stop money, goods and technology getting to the Soviet Union.

The Soviets in turn were angry for two
reasons. Firstly, they didn’t want anyone to rain on their Olympic show
and secondly they needed Western technology to organise the games. We
became involved when the Olympic Authorities in Moscow wanted computers to
register accredited journalists and participants. We agreed to do the
systems but we were not sure we would get export licences. All of our
licences were always vetted by both the UK government and NATO in Paris.
We had to work hard to get the licences. We installed the systems and they
worked well. We probably earned a few Brownie points with the Soviets
because the contracts continued to flow. We supplied a system to Progress
Publishers the largest publisher in the USSR and we set up our first
office in their premises in Moscow. Our next big challenge was soon to
come.

The exploitation of the Siberian oil and gas
reserves had been a long time Soviet aspiration. The investment,
technology and project management skills needed to tap these resources
were formidable. The Soviets had long dreamed of being the energy supplier
to Europe, earning hard currency and relishing the potential political
influence that it would bring .By the late 1970s advanced planning was
underway for building a has pipeline from Siberia to Eastern Europe via
the Ukraine with further extensions as far as Italy.

The invasion of Afghanistan, the election of
President Reagan and the end of détente meant that any prospect of US
technology for building and operating the pipeline had vanished. The
Soviets needed a new plan. There were two critical problems with their old
plan. They could build the pipes and storage, they had the technology to
control and meter the flow but they needed turbines to drive the gas along
the pipes and a sophisticated maintenance and logistics system to keep the
pipeline operating .The initial pipeline was 1500 miles long. The
maintenance and logistics system needed computers and telecommunications
facilities that they did not have even in their military systems. If the
project was to move forward, they had to find non-US suppliers and
know-how. By default, these had to be Europeans. But few countries had the
capabilities and even fewer companies had the experience. There wasn’t
much choice.

We were asked to bid for the project. We were
somewhat diffident. It looked like big Trouble – political, security,
technical, environmental – and the client was already showing signs of
paranoia. We examined the requirement, thought about it and sketched out
some possible solutions. There were no easy answers. We thought that there
had to be some way of meeting the requirements within the limitations of
the technology embargo then in force. Because it was difficult it was also
intriguing. We decided that it was one of those high risk/ high rewards
projects and on that basis we decided to proceed. The European turbine
manufacturer took the same view.

Basically our preferred solution was to build
a network of 46 real-time computers located at pumping stations along the
1500 mile length of the pipeline. The computers would have 1200
work-stations and could be controlled from anywhere with a telephone line.
In addition 240 Teleputer PCs would be installed in managers’ offices and
homes to monitor and manage the system. The system was Cyrillic. Remember
that this was 1981 not 1991 and we had to work within the performance
constraints of the technology embargo.

We needed 1500 engineers to support the system
which would operate 24/7. Our proposal was that we would set up a school
at Gazprom in Moscow to train engineers. We would train the trainers in
the UK. We would set-up repair workshops and spares depots so that Gazprom
would be self-sufficient. Some of the operating conditions were
challenging. Pipes would be welded in sub-zero temperatures. There would
be leaks and accidents. Repair and maintenance would be vital to keep the
pipeline functioning. We thought we had a workable solution.

The political problems were huge. The US did
not want the pipeline built. They were committed to destroying the ‘evil
empire’ not helping the Soviets.. We had some US-made components in our
computers and there were arguments about whether or not they were included
in the US embargo. Getting export licence approval was a long, torrid
affair. It seemed that every level of official and politician in the UK
government and NATO was involved. The UK government was helpful and
supportive throughout. Reputedly, the US content issue was only resolved
when President Reagan visited Mrs Thatcher at Downing Street.

Then the security issues took centre-stage.
The project, the specifications, the technology and the people were
scrutinised, reviewed, debated, analysed and judged. The biggest problem
was the telecom network. Even though we had abided by the embargo limits
it was believed that our system still far exceeded the capability of the
then current Soviet military systems. So we had to re-design it and
down-grade it so that it would still just do the job but it could not be
modified or used for any other purposes. There was endless analysis of the
pipeline route. The Soviets had three completely different route maps.
No-one seemed to know actually where the pipe would be. Someone said years
later in Moscow that the task of a Soviet reconnaissance satellite was to
find where they had built the pipeline!

Eventually the export licences were agreed in
principle by all the parties involved. It had been a marathon. Now we
needed a contract. We had a 3 man negotiating team in Moscow. Gazprom had
20-30. We had a system for negotiating and the 3 man team was deliberate.
Negotiations took place in huge conference rooms with a large rectangular
table. The two sides faced each other across the table. I never saw a
square or circular table anywhere in Eastern European negotiations. It was
always conflict bargaining mode.

The Soviets would sit down one side in a long
line. Our team would sit in a tight triangle – two at the table, one
behind. The team were directly opposite the lead negotiator. Team-members
were inter-changeable and would spell each other during the negotiations
that would often last 15-18 hours at a stretch. The two at table
communicated with each other by cryptic written-notes that would be passed
back and kept by the third member. At table, one was the writer and one
was the talker. All the negotiations were in native tongues, English and
Russian, with everything being translated. This provided good time to
formulate responses. The third team-member was also the numbers person,
working the model, fact checking and talking on the telephone. We had an
open telephone line to Crawley UK during the negotiations with a Crawley
team working the issues. We knew that the telephone line was bugged but we
had planned for that. We also had 100 stratagems for saying ‘no.’ [We used
a similar negotiating technique in a Merchant Bank in the City of London
sometime later with similar results.]

After a 3 day marathon negotiation we secured
the contract on very favourable terms. The contract was signed at the end
of 1981.Shipments were due for completion by the beginning of 1983 and
live running would commence in late 1983. The initial value was £7.6
million. We set about assigning our best people to the project and giving
it top priority. It was a busy time because we were also doing big
projects in the UK. Gazprom were well organised and professional. They
were good working partners. The project went well, on time, on budget and
meeting expectations.

The political situation wasn’t good. Soviet
relations with the West were bad. The Afghanistan adventure [known in the
US as Charlie Wilson’s War after the Texas Congressman who persuaded the
US Congress to fund the Afghan Resistance] was already in bad shape with
no end in sight. The Soviet leadership was particularly unimpressive and
devoid of any progressive policies. The only commodity not in short supply
was paranoia.

Towards the latter part of 1981 as the big
bulk shipments from the UK were being planned, Gazprom decided to
accelerate the shipments. It was frightened that the supply chain was
going to be broken by the level of political rhetoric. So we planned an
airlift bringing all the outstanding deliveries forward to December 1982.

As usual we waited for all the funds to clear
in full before the aircraft left for Sheremetevo Airport in Moscow. The
weather was poor, snow and freezing temperatures. The electronic equipment
was unloaded on to open trucks – apparently there were no other trucks
available- and moved to downtown warehouses. Gazprom was relieved to have
received all the equipment and could stay with their late 1983 live
running date.

In the Spring of 1983 we received a message
that there was a problem with the new equipment. Upon investigation we
found that it had been stored and left unchecked over the winter in
unheated warehouses. Icicles had formed in the warehouse ceilings and with
spring had started to melt, soaking the electronics much of which was
beyond repair. The problems with the trucks and warehouses were indicative
of the fragile infra-structure of the USSR. While enormous efforts could
go into space spectaculars for propaganda purposes, there was never enough
money to go into everyday facilities and the problems caused thereby were
expensive to fix and very frustrating.

The equipment was re-ordered and replaced. The
system went live on schedule and eventually the gas began to flow. A new
chapter in European energy supply had started.

We continued to do well in the USSR until the
late 1980s. We opened new offices and hired some local nationals. The
security apparatus still kept close tabs on us but it wasn’t as
intimidating as it had been in the past. We used a number of freelances to
help. These were young Jewish men in the main who were waiting to get to
Israel under the occasional schemes that the Israeli government was able
to negotiate. We helped by paying them in hard currency. They were good
programmers and systems analysts. Our main client base was around Moscow
and we supplied a large number of systems to various organizations. There
were still occasional export licence problems.

By the late 1980s it was clear that the Soviet
Bloc was falling apart and it was anyone’s guess as to what would happen
in the USSR. We started to re-trench not willing to get involved in events
of the future. It was clear that our Eastern European business model had
run its course and we had no wish to create another one. By the 1990s the
USSR had dissolved and a kind of Wild West semi-capitalism was emerging
with former KGB operatives to the fore. We continued to support existing
clients but were not comfortable with the new modus operandi and we
quietly withdrew. It had been a very significant experience, generally
enjoyable with some dark times and very challenging and profitable.